1. Entering Foreign Markets
Presented by
Maxim Simonov

2. Where to Enter?
Evaluate:
• Political factors
• Economic factors
• Demographic factors
• Purchasing power

3. When to enter?
First Movers
Advantages:
• Preempt rivals and
capture demand
Disadvantages:
• Pioneering costs

4. What would be the Scale of
Entry?
Big Scale
• Commitment
• Confidence
• Inflexibility
Small Scale
• Learning
• Flexibility

5. Entry Modes
Exporting
Joint Venture Turnkey Project
Entry Modes
Subsidiary Licensing
Franchising

6. Exporting
Advantages:
• No costs associated
with building
manufacturing facilities
Disadvantages:
• Transportation costs
• Tariffs
• Exporting agent who
can also work for a
competing firm

7. Turnkey Project
Advantages:
• Less risky than FDI
• Good way to earn an
economic return from
know-how
Disadvantages:
• No long-term interest in
the foreign country
• The firm may create a
competitor

8. Licensing
Advantages:
• Bearing no costs
with development
and risk
• Royalty payments
Disadvantages:
• Passing control over
manufacturing
(RCA)

9. Franchising
Advantages:
• Bearing no costs with
development
• Passing control over
manufacturing QuickTimeª and a
TIFF (Uncompressed) decompressor
are needed to see this picture.
Disadvantages:
• Using a company’s
brand name puts the
company’s reputation at
risk

10. Joint Venture
Advantages:
• Combines one
company’s expertise
with the other
company’s local QuickTimeª and a
TIFF (Uncompressed) decompressor
knowledge
are needed to see this picture.
Disadvantages:
• Risks of giving
control of
technology

11. Wholly Owned Subsidiaries
Advantages:
• Gives a firm a 100%
share in the profits
• Tight control over
operations
• Protection of
technology
Disadvantages:
• Costly investment

12. Questions