Global Entry Strategies

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This PowerPoint gives you knowledge about the five global entry strategies and examples of each.

Global
Entry
Strategies
BY LYNDSEY ARDEN

Introduction
In order for firms to enter a new
market, they can pick from five
different style approaches
dependent upon the level of risk
they are willing to take.

What is a risk?
The definition of a financial risk is the potential loss experienced by an investor in a product or
business that could loose all their money. The more debt a business has, the higher the financial
risk because they may not meet the obligations to pay back their debts.

Exporting
The manufacturing of goods in one country
and selling them to another
Known as the least financial risk due to not
capitalizing in people, equipment,
buildings, etc.

Franchising
A franchise is an agreement between a firm and an individual allowing them to operate a
business using their business name and format permitted by the franchisor.
Globally, there is little risk and does not require higher investments because it would cost the
firm more to open it themselves.
Example: Common franchises are Skyline, McDonald’s, Starbucks, Domino’s Pizza, etc.

Strategic Alliance
An agreement between two independent
companies that are working together on a
common project without having a
partnership and investing in each other.
Examples: Uber has alliances with Spotify
& Pandora. Also, Starbucks and Barnes &
Nobles

Joint Venture
A new firm in the market and
local company join together and
share ownership, control, and
profits of a new company
The local partner offers
information on foreign entrant
understanding of the market and
gives access to resources
Examples: Google and Nasa
joining together to form Google
Earth

Direct Investment
Through the formation of solely owned subsidiaries, a firm must keep 100% ownership of its
plants, operation facilities, and offices in foreign countries.
Direct investment is once of the riskiest because it requires the highest level of investment
exposing the company to loosing its initial investment and/or the cost of operating.
Foreign entrant risks can be increased by natural disasters, war, political instability, or changes
in the countries laws.

Conclusion
Before a firm can enter a global market it must determine how much risk they are willing to
take. There are different levels or risk and rewards for each global entry strategy. The lowest risk
investment would be exporting. Also, the highest risk investment is the direct investment due to
the large investment.

Reference
Grewal, Dhruv, and Levy, Michael. Marketing. Boston: McGraw-Hill Irwin, 2010. Print.

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Global Entry Strategies

1. Global Entry Strategies BY LYNDSEY ARDEN

2. Introduction In order for firms to enter a new market, they can pick from five different style approaches dependent upon the level of risk they are willing to take.

3. What is a risk? The definition of a financial risk is the potential loss experienced by an investor in a product or business that could loose all their money. The more debt a business has, the higher the financial risk because they may not meet the obligations to pay back their debts.

4. Exporting The manufacturing of goods in one country and selling them to another Known as the least financial risk due to not capitalizing in people, equipment, buildings, etc.

5. Franchising A franchise is an agreement between a firm and an individual allowing them to operate a business using their business name and format permitted by the franchisor. Globally, there is little risk and does not require higher investments because it would cost the firm more to open it themselves. Example: Common franchises are Skyline, McDonald’s, Starbucks, Domino’s Pizza, etc.

6. Strategic Alliance An agreement between two independent companies that are working together on a common project without having a partnership and investing in each other. Examples: Uber has alliances with Spotify & Pandora. Also, Starbucks and Barnes & Nobles

7. Joint Venture A new firm in the market and local company join together and share ownership, control, and profits of a new company The local partner offers information on foreign entrant understanding of the market and gives access to resources Examples: Google and Nasa joining together to form Google Earth

8. Direct Investment Through the formation of solely owned subsidiaries, a firm must keep 100% ownership of its plants, operation facilities, and offices in foreign countries. Direct investment is once of the riskiest because it requires the highest level of investment exposing the company to loosing its initial investment and/or the cost of operating. Foreign entrant risks can be increased by natural disasters, war, political instability, or changes in the countries laws.

9. Conclusion Before a firm can enter a global market it must determine how much risk they are willing to take. There are different levels or risk and rewards for each global entry strategy. The lowest risk investment would be exporting. Also, the highest risk investment is the direct investment due to the large investment.

10. Reference Grewal, Dhruv, and Levy, Michael. Marketing. Boston: McGraw-Hill Irwin, 2010. Print.