08-17-2017, 12:16 AM
PRESENTED BY:
MANTHAN GATTANI
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GLOBAL MARKET ENTRY STRATEGIES
1. EXPORTING
It is the most traditional mode of entering the foreign market.
When to consider?
The volume of foreign business is not large enough to justify production in foreign market.
Cost of production is high in overseas market.
The company has no permanent interest in that market.
There are political or other risks of investment.
Types of exporting
2. LICENSING
Is an agreement that permits a foreign company to use industrial property(i.e. patents. trademarks and copyrights) technical know-how and skills (eg. Feasibility studies) architectural &engineering designs or any combination of these in a foreign market.
The monetary benefit to the licensor is the royalty or fees which licensee pays.
3.FRANCHISING
Is a form of licensing in which the parent company (the franchiser) grants the independent entity (the franchiser) the right to do a business in a prescribed manner.
The right can take the form of selling the franchisor s products using its name, production and marketing techniques or general business approach.
CROSS FRANCHISING
4.JOINT VENTURE
JV is an enterprise formed by 2 or more investors during ownership and control.
5.ACQUISITIONS
When a manufacturer wants to enter a foreign market, rapidly and yet retain max. control.
6. MANUFACTURING
Companies with long term & substantial interest in the foreign market normally establish fully owned manufacturing facilities.
Types:
Contract Manufacturing
Fully owned Mfg.
Advantages
Gain access to raw materials.
Take advantage of labor cost.
Cost saving in shipment etc.
Make price more competitive by avoiding import duties etc.
For host country- FDI, Job creation etc.
7.ASSEMBLY OPERATIONS
In this strategy parts or components are produced in various countries to gain each country s comparative advantage.
Cost advantage
Import duty is low on components.
Employment generation in low developed countries.
8.STRATEGIC INTERNATIONAL ALLIANCE
It is a business relationship established by 2 or more companies to cooperate out of mutual need and to share risk in achieving a common objective.
They are sought as a way to shore up weaknesses and increase competitive strength.
It is contract based and not equity based.