Wall Rx is considering various options to expand internationally such as exporting, direct investment, joint ventures, franchising, and licensing. Licensing is recommended as the best strategy for the following reasons: Licensing allows Wall Rx to expand its business reach and sales without investing in new locations or distribution networks. It also spreads costs and maximizes returns on R&D. Licensing provides access to new markets not reachable through existing facilities with little political risk. It offers a fast, easy way to access host countries' assets and resources for rapid brand and market expansion.

2. A Glance at Product Features
An all-in-one tool
kit that is a
substitute for the
utilities required
Sizes
available:
1*1 inch
patch to 6*6
inch patch
Price P.U.:
4.99 to
$6.99
Cost P.U.:
$2 to $2.50
Neatly Packaged
with all essentials
needed for patch
fix

3. STRENGTHS
Easy to manufacture with
no specialized raw
materials, technology
Light Weight; Easy to
transport
Competitively priced;
Cost Effective
WEAKNESSES
No International Brand
Image
Limited availability of
Funds and established
facitilities
Lack of knowledge of
target markets
THREATS
Penetration in some
foreign markets may be
difficult due to compex
corporate and patent
laws, political scenarios
and ease of doing
business
OPPORTUNITIES
Rapid Business Expansion
through success in
International Markets

4. Competition
Entry Barriers
Structural
Uncertainty
Relations with
suppliers and buyers
Strategic Objective
Type of
International
Strategy
Firm’s Experience
and resources
Nature of Knowledge
Market Demand
Cultural Differences
Infrastructure
conditions
Government policies
and economic
conditions
Project Size
Contractual Risk
Investment
commitment
Project orientations
and partner
availability
Industry Specific Firm Specific Country Specific Project Specific
How should Wall Rx decide which mode of entry is the best strategy?
It must analyze the following parameters:
A study of the company’s own strengths and weaknesses, above mentioned factors along
with other determinants of choice of strategy makes a case for LICENSING as the best fit

6. Exporting
Direct
Investment
Joint Venture
Sub
Contracting
Franchising
Licensing
ExtentofInvestmentRisk
ResourceCommitment
Degree of Ownership and Control
Profit Potential High
High
Low
Determinantsof Choice of Entry

7.  By licensing to third parties, Wall Rx shall be able to :
 Expand its businesses' reach and grow sales without having to invest in
new locations or distribution networks, and risking failure
 Spread around the costs of and maximize returns on company’s
research and development
 Reach new markets not accessible by export from existing facilities
 Little political risk is involved
 Fast and easy avenues to host country’s assets, cheap resources etc
 Rapid diffusion of brand and operating footprint
 A license is a contract through which one party grants another
permission to use its patents, trademarks, copyrights, designs or trade
secrets
 The organization receiving the license, or licensee, compensates the
licensor by paying a flat fee, royalties or a combination of the two
 The agreement does not transfer ownership of the intellectual
property
WHAT IS LICENSING?
WHY LICENSING SEEMS
THE MOST VIABLE OPTION

8. • Exporting the product directly to foreign countries may push up costs and impact
prices due to currency exchanges
• The company will have little control over marketing, advertising and brand
positioning of the products
• Wall Rx may become vulnerable to bargaining power of importers or other
problems like government regulations, cultural differences
• Limited existing facilities in the home country may require further investment in
home country.
• Shortage of capacity may limit international expansion
Why not export?

9. • Sub Contracting requires greater commitment of time and money than licensing
and therefore is a high risk proposition
• The process, although involving greater control over market operations, requires
that the company has adequate knowledge of the international market in which
it plans to invest. Thus, rapid expansion may be difficult
• Trade restrictions and other political or demographic factors within the country,
lifestyle differences and perception of the product’s viability in the target market
may pose significant barriers
Why not Sub Contracting?

10. • Joint Ventures are notoriously hard to sustain even in stable economic and political
conditions and are uncertain and complex in general
• Require huge deployment of funds and negotiations of terms and conditions are
extremely time consuming
• Wall Rx may become vulnerable to the partner’s bargaining power and lose control
over the product
Why not Joint Investment?
• Franchising involves longer-term commitments than licensing
• Stringent controls over quality, prices and , adherence to operation procedures
may not be required
Why not franchising?

11. • Economic policies, political scenario and corporate laws of the foreign country have a
direct impact on the ease of doing business in the host country
• Government approvals for transfer of ownership and clearance of property, local
bureaucracy is often a hurdle
• Regional rivalries, transportation links and other infrastructural issues have a bearing
on efficient movement of products within the foreign markets
• An accurate information of the foreign market is extremely necessary, lack of which
may lead to huge investment risks
Why not Direct Investment?

12. Straight extension vs Product Adaptation
Straight Extension can be adopted by Wall Rx given the product is a
basic, standardized product with generic usage. The product design is
simple which makes the product easy to use.
However, the company may choose to modify the packaging with
instructions in multiple languages.
Offering product
virtually
unchanged in
markets outside of
home country
Changing elements
of design,
function, and
packaging
according to needs
of different
country markets