Foreign market entry strategies include exporting, licensing, joint ventures, acquisitions, and foreign direct investment. FDI occurs when a firm invests directly in new facilities abroad. There are options with varying levels of commitment and control, from non-equity agreements like exporting and licensing to full ownership through acquisition. Choosing the right strategy depends on goals, resources, and the target market's business environment.

1. MARKET ANALYSIS & FOREIGN MARKET ENTRY STRATEGIES

2. Foreign market
Entry strategies
Different options to
Enter the market
Time product Goals

3. No investment
overseas
Requires investment
overseas
Exporting
Licensing
Management
contracts Joint
Venture
AcquisitionAssembly
OperationsTurnkey
operations

4.  Foreign direct investment (FDI) occurs when
a firm invests directly in new facilities to
produce and/or market in a foreign country
◦ Once a firm undertakes FDI it becomes a
multinational enterprise

5.  There are two ways to look at FDI
1. The flow of FDI - the amount of FDI undertaken
over a given time period
2. The stock of FDI - the total accumulated value
of foreign-owned assets at a given time
 Outflows of FDI are the flows of FDI out of a country
 Inflows of FDI are the flows of FDI into a country
 FDI is not the investment by an individual. It is the
investment of the multinationals

6. Produce in Home country Sale in host country

8. Not always an optimal
strategy
Trade barriers Low profit

9. Lack of product
modification
inflexible
unresponsive
Difficult when
home currency is
strong

10. Agreements
Permits to use
Industrial property
(patents, trademarks,
copyrights)

11. quick expansion
(entry) when capital is
scarce
Protects the
company patent and
trade mark
Flexibility as it
allows a quick way to
enter into market

12. It works well
when
transportation
cost is high
Low risk and
avoid other
difficulties with
licensing
The band is
extended into
new product
categories

13.  Restrict Geographical region.
 What Can go Wrong.
 Wrong Decision Of Licensor.
 Business Risk.
 More Competitor In Future.
 No Direct Control.

14. Entry strategy for a single target country in which the partners
share ownership of a newly created business entity

15. Partnership

16. Change in
mission and
power
Conflicts
among
partners
Centrally
planned
economies
Matter of
control

18.  Access to Target Market
 Access to cheap input
 Reduced Transportation cost
 Job Creation
 Additional Resources
 Decrease in price

19.  Large initial investment
 Legal issues
 Local industry exploitation

20. Two parties are involved
1) Owner of the Business
2) Third party
(management company)

21. Minimum
Risk
Increase in
Local
Employment
Minimum
Investment
Time
saving

22.  Loss of Control
 Loss of
 Flexibility
 Loss of Quality

24. Utilization of
Labor
Capital
intensive &
Labor intensive
Price
Competitive

25.  Drop of Unique
Craftsmanship
 More Time, Money
Required
 Not Appropriate for
Capital Abundant
Country

27. Better way to
grow
Meeting
Stakeholders’
Expectations
New
Resources &
Competencies
Speed
Lower
Risk
Financial Gain

28. Replacement
of domestic
ownership
Value of
currency
Legal
hurdles
Complex,
expensive
and risky

30. A designed zone where free manufacturing,
Logistics, distribution and trade activities are
Guaranteed.

31. Improve
cash flow
Shipping in
Bulk quantity