This document discusses various modes of international market entry for companies looking to expand globally. It describes exporting, both direct and indirect; offshore services; international licensing; franchising; turnkey projects; contract manufacturing; and management contracts. For each entry mode, it provides brief definitions and discusses their pros and cons. Management contracts, turnkey projects, and contract manufacturing are referred to as "specialized entry modes" since they involve shorter-term investments and less financial risk than other options. The document aims to help companies understand the different options available for entering international markets.
Foreign Direct Investment (Theories of FDI)Mamta Bhola
the opening up of the national frontiers has led to a tremendous cross border movement of capital. This has led to a large number of MNC's that have invested foreign capital in a number of countries. MNC's through FDI have expanded their business operations to a large extent.
Concept of international business environmentPinki Verma
Presentation on Concept of International Business Environment which includes:
1. Difference between International Business and International Business Environment
2.Difference between Domestic Business and International Business
3.Entry Modes of International Business
4.Nature of International Business
5.Advantages of International Business
6.Classification Of International Business Environment
(a) Micro and Macro Environment
(b) Domestic, Foreign and Global Environment
7.Components Of International Business Environment with examples.
To watch more ppt follow our channel.
Foreign Direct Investment (Theories of FDI)Mamta Bhola
the opening up of the national frontiers has led to a tremendous cross border movement of capital. This has led to a large number of MNC's that have invested foreign capital in a number of countries. MNC's through FDI have expanded their business operations to a large extent.
Concept of international business environmentPinki Verma
Presentation on Concept of International Business Environment which includes:
1. Difference between International Business and International Business Environment
2.Difference between Domestic Business and International Business
3.Entry Modes of International Business
4.Nature of International Business
5.Advantages of International Business
6.Classification Of International Business Environment
(a) Micro and Macro Environment
(b) Domestic, Foreign and Global Environment
7.Components Of International Business Environment with examples.
To watch more ppt follow our channel.
This presentation describes modes of entry in International Market for businesses. Various types of modes has been explained from International business expansion point of view.
Foreign direct investment , FDI in India by abhishek tripathiAbhishek Tripathi
This presentation will answer so many questions raising against FDI decision in India. It includes What is FDI, Factors affecting FDI, Advantages and Disadvantages of FDI in India
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henry fayols 14 principles used in effective slides without words.. just use the image and explain the title.. thus you can avoid the mistakes and more quastions
Foreign direct investment (FDI) in India has played an important role in the development of the Indian economy. FDI in India has - in a lot of ways - enabled India to achieve a certain degree of financial stability, growth and development. This money has allowed India to focus on the areas that may have needed economic attention, and address the various problems that continue to challenge the country.
INTERNATIONAL MARKET DEVELOPMENT
CLASS PROJECT - WINE TRADE
Students have been assigned to a team of 2 or 3 to develop an international market development project.
Students are assigned to work for the same fictitious wine domaine: Domaine de X, with the same product line. They will be given fixed parameters/constraints regarding the wines and the domaine.
Each team will be assigned a different market for these wines, specifically:
-a specific country: Netherlands
-a type of retailer : Hotels and restaurants
INTERNATIONAL ENTRY MODES
Criteria for Country selection :
Choosing Product to trade in International markets
Global Product Strategies
Strategy for new product launch
STANDARDIZATION VS ADAPTATION
FOREIGN MARKET ENTRY MODES
Charles Hills defines globalization as "The shift towards a more integrated and interdependent world economy". Globalization has two main components - the globalization of markets and the globalization of production.
According to International Monetary Fund, globalization means "the growing economic interdependence of countries worldwide through increasing volume and variety of cross border transactions in goods and services and of international capital flows and also through the more rapid and widespread diffusion of technology. Interdependency and integration of individual countries of the world is also called as globalization”.
Factors associated with Entry Mode
Timing of an Entry
FIRST MOVER ADVANTAGE
Scale of Entry & Strategic Commitments
ENTRY MODES
Explain exporting, turnkey projects and licensing entry modes with their advantages and disadvantages.
Explain franchising, joint venture and wholly owned subsidiaries with its advantages and disadvantages.
SELECTING ENTRY MODE
PROS & CONS OF ACQUISITION
PROS &CONS OF GREENFIELD VENTURES
What is strategic alliance?
What are the advantage and disadvantages of strategic alliance?
What are the factors contributing to the success of an alliance?
International Business Dynamics module 2 by Nagarjun ReddyPNagarjunReddyReddy
Complete detail of Second Module International Business Dynamics contents, Globalization – Supporting Institutions in International Conflict Resolution
This project I made for my organization, This BI I made with excel, which is dynamic and sales and stock can be follow up by this excel. Simple and Powerful
Modern Database Management 12th Global Edition by Hoffer solution manual.docxssuserf63bd7
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Focusing on what leading database practitioners say are the most important aspects to database development, Modern Database Management presents sound pedagogy, and topics that are critical for the practical success of database professionals. The 12th Edition further facilitates learning with illustrations that clarify important concepts and new media resources that make some of the more challenging material more engaging. Also included are general updates and expanded material in the areas undergoing rapid change due to improved managerial practices, database design tools and methodologies, and database technology.
Artificial intelligence (AI) offers new opportunities to radically reinvent the way we do business. This study explores how CEOs and top decision makers around the world are responding to the transformative potential of AI.
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1. Modes of International market
entry or expansion
Do not put all eggs in
one basket.
― Warren Buffet
2. “Creative Crew”
group identification
Crew number Crew name ID
# Crew 1 Rahat Ahmed Chowdhury 131-116-051
# Crew 2 Shufia Befum Shuly 131-116-066
# Crew 3 Koyray Alahe Tuhin 131-116-060
# Crew 4 Md. Abdul Matin 131-116-070
# Crew 5 Sonchita Rani Nath 131-116-054
# Crew 6 Sourov Badiya 131-116-259
3. Acknowledgment
Preparing this assignment appeared to be a great experience to us. It added a lot to
our knowledge. This assignment is one of our memorable experiences in student life.
We also would like to give a lot of thanks to our honorable course teacher, Md.
Saidur Rahman a.k.a Polash sir for giving us a wonderful opportunity to make
such an interesting and valuable assignment and giving us a clear concept about the
assignment.
4. International market entry
Once a firm has decided to establish itself in
global market—it becomes necessary that
the company studies and analyzes the
various options available to enter the
international markets and select the most
suitable one.
In order to succeed in international markets,
the decision to select an appropriate entry
mode is a crucial and integral part of a firm’s
international marketing strategy.
5. Why firms goes international???
Major reasons for firms going international are:
Profitability
Growth
Economies of scale
Access to resources
Marketing opportunities
USP of product & services
7. Exporting
Exporting is frequently employed mode of
internationalization.
It is one of the simplest and most common
approaches adopted by firms in their
endeavor to enter foreign markets.
Simply we can define it as,
“Exporting is marketing and sale of
domestically produced goods in another
country. “
8. Exporting classified
Direct export: Producer sells directly to the
importer. This mode gives the company a
greater degree of control over its distribution
channels.
Indirect export: Indirect exporting is the
process of exporting through domestically
based export intermediaries.
9. Classification of export continues…..
Intra corporate transfer: It is a process of
exporting which includes, sale of goods by a
firm in one country to an affiliated firm in
another.
Piggybacking: In piggybacking exports, overseas distribution channels of another firm are used by
the company to make its product available in the overseas market. Exporting company know as
‘Rider’, uses a foreign company which has an established distribution network in foreign market,
known as ‘Carrier’.
10. Pros & Cons of Exporting
E
x
p
o
r
t
i
n
g
Relatively low financial exposure
Permit gradual market entry
Acquire knowledge about local
market
Avoid restrictions on foreign
investment
Vulnerability to tariffs and NTBs
Logistical complexities
Potential conflicts with distributors
11. Providing offshore services
A company of a country can provide offshore services to
overseas clients with the help of information and
telecommunication technology.
Offshore services is similar to outsourcing. But offshore
activities can’t be termed similar with outsourcing.
Business sectors which provide opportunities for offshore
services include: Insurance, Banking & Finance, Airlines,
Telecom, Automotive, Transportation etc.
‘Gartner’ one of the world’s famous offshore power.
12. Offshore services
The work is done overseas
Outsourcing
Someone else does the work for us
V/
S
Offshore services versus Outsourcing
Operations decision Outsourcing? Off shoring?
A UK based firm sets up its own call centre in
Bangladesh to serve the UK customers
No Yes
A UK based firm hands over its payroll processing
activities to a specialist supplier in Bangladesh
Yes No
13. International Licensing
Under a licensing agreement the licensor,
leases the right to use its intellectual
property—technology, work methods, patents,
formulas, inventions, designs, copyrights,
brand names, or trademarks—to licensee, in
return for a fee.
14. Pros & Cons of International Licensing
• Low financial risks
• Low-cost way to assess
market potential
• Avoid tariffs, NTBs,
restrictions on foreign
investment
• Licensee provides
knowledge of local
markets
• Limited market
opportunities/profits
• Dependence on licensee
• Potential conflicts with
licensee
• Possibility of creating
future competitor
15. International Franchising
Under franchising, an independent organization
called the franchisee operates the business
under the name of another company called the
franchisor.
Franchising is a form of Licensing but the
Franchisor can exercise more control over the
Franchisee as compared to that in Licensing
16. Pros & Cons of International Franchising
Pros
• Proven products & Services
• Proven Trade Mark
• Reduced Risk of Failure
Cons
• Does not provide
experiential knowledge in
foreign markets
• High potential for
opportunism
• High monitoring costs
17. Licensing
Operations can be done by own
way
Licensee has to pay royalty fee and
it is comparatively low
Products are major source of
concern
Life cycle: 15-20 years
Licensee enjoys substantial
measure of fee negotiation
Licensor exercise less control over
licensee
FranchisingV/
S
Licensing versus Franchising
Operations is done by following
licensor’s rule
Franchisee has to pay management
fee and it is very high
Covers all aspects of business
including goodwill, trade marks,
IPR etc
Life cycle: 5-10 years
Standard fee structure
Franchisor exerts greater control
over franchisee
18. Turnkey project(B.O.T)
A turnkey project is a contract under which a
firm agrees to fully design, construct and
equip a manufacturing/business/service facility
and turn the project over to the purchaser
when it is ready for operation, for
remuneration
The company hires a contractor in the desired
country that they want to create an operation.
At the completion of the contract, the foreign
company gives the “key” to the project and it
is ready for operation.
19. Pros & Cons of Turnkey project
•Focus firm’s resources on
its area of expertise
•Avoid all long-term
operational risks
•Financial risks
•Cost overruns
•Construction risks
•Problems with suppliers
20. Contract manufacturing
Contract manufacturing is a process that
establishes a working agreement between two
companies. As part of the agreement, one
company produces parts or other materials on
behalf of their client. Simply it can be defined
as the process of outsourcing entire or part of
a company’s manufacturing operations.
A number of global companies outsource their
manufacturing activities to low-cost locations.
21. Pros & Cons of Contract manufacturing
Low financial risks
Minimize resources devoted to
manufacturing
Focus firm’s resources on other
elements of the value chain
Reduced control (may affect
quality, delivery schedules, etc.)
Reduce learning potential
Potential public relations
problems
22. Management contract
A management contract is an agreement
between two companies whereby one company
provides managerial assistance, technical
expertise and specialized services to the second
company for a certain period of time in return for
monetary compensation.
Most management contracts provide for
training of local personnel who will eventually
take over the management responsibilities.
23. Pros & Cons of Management contract
Pros
• Focus firm’s resources on its
area of contracts
• Minimal financial exposure
Cons
• Potential returns limited by
contract expertise
• May unintentionally transfer
proprietary knowledge and
techniques to contractee
24. Specialized entry modes
Management contract, Turnkey projects, &
Contract manufacturing are known as
specialized entry modes. Previously we have
discussed about them. Now we will know:
Why they are called specialized entry modes?
These entry modes are called ‘special’ because
the activities included on them contains short term
investment, less litigation risks, less exposure
to financial risks, compared to other sorts of entry
modes